LOWELL, Mass. — (BUSINESS WIRE) — August 28, 2013 —
SofTech, Inc. (OTCQB:
SOFT),a proven provider of Product
Lifecycle Management (PLM) solutions today announced its fourth quarter
and fiscal year 2013 operating results. Revenue for the three months
ended May 31, 2013 was approximately $1.56 million, an increase of more
than 3% from the same period in the prior fiscal year. This was the
first fiscal quarter since August 31, 2007 in which the Company
experienced an increase in its quarterly revenue when compared to the
same period in the prior fiscal year, excluding the revenue increase
resulting from the sale of patents in Q1 and Q2 of fiscal year 2013. Net
income(loss) for the current quarter was about ($51,000) or ($.05) per
share compared to net income of $67,000 or $.07 per share for the same
period in the prior fiscal year. Included in the current quarter
operating results were the following non-recurring charges related to
our Q4’13 debt refinancing:

a) Included in SG&A, a non-cash charge of $108,000 of unamortized debt
issuance costs from our previous debt facility that was fully repaid
during the quarter; and

b) Included in Interest expense, an accrual of $75,000 as an estimate of
payments due our former lender equal to 1.5% of quarterly revenue for
each of the first three fiscal quarters of 2014.

EBITDA for current quarter was about $292,000 as compared to about
$212,000 for the same period in fiscal year 2012, an increase of 37.7%.

Revenue for fiscal year 2013 was approximately $6.36 million, down
approximately 1.2% from the prior fiscal year. Net income for fiscal
year 2013 was $360,000 or $.35 per share as compared to a net income of
$444,000 or $.45 per share for the prior fiscal year. Fiscal year 2013
results included the above detailed non-recurring expenses totaling
$183,000 related to the refinancing of our debt facility. EBITDA for
fiscal year 2013 was approximately $1.12 million as compared to about
$1.03 million for fiscal year 2012, an increase of about 9.4%.

Commenting on current year performance, Joe Mullaney, SofTech CEO since
the March 2011 Recapitalization Transaction (described in the Form
10-K), said: “Fiscal 2013, our second full fiscal year since the
Recapitalization Transaction, represented significant improvement on
multiple fronts in our business including the following:

Experienced the first revenue increase in a current year quarter
compared to prior year quarter from products and services since the
quarter ended August 31, 2007;

Continued our investment in new products;

Won four new customers for our subscription based, Connector
technology;

Increased EBITDA by more than 9%, cash flow from operations improved
by a multiple of 10 times;

Secured a multi-million dollar, long term debt facility with reduced
borrowing rates and principal repayments for two years;

Repurchased 16% of our outstanding shares in June 2013 (unregistered
restricted shares held by largest shareholder); and

In summary, we achieved organic revenue growth in Q4’13, strengthened
our partnership agreement, improved our balance sheet while
significantly increasing operating cash flows. Overall, a solid fiscal
year and one that we believe we can continue to improve upon.”

FINANCIAL STATEMENTSThe
Statements of Operations for the three and twelve month periods ended
May 31, 2013 compared to the same periods in the prior fiscal year are
presented below. A reconciliation of Net income(loss) to EBITDA, a
non-GAAP financial measure, is also provided.